DESCRIPTION (Verbatim from the Applicant): Decreased osteoblastogenesis in old age is accompanied by an increase in adipogenesis in the bone marrow of animals and humans. Since osteoblasts and adipocytes share a common mesenchymal progenitor, it is hypothesized that the osteopenia associated with aging is the result of changes in mesenchymal cell commitment and differentiation in the bone marrow. These changes result in an increase in adipogenesis at the expense of osteoblastogenesis. We demonstrated that marrow stroma derived from old animals consists of a larger number of cells that express PPARgamma2, an adipocyte specific transcription factor, than marrow stroma derived from young animals. In addition, we have shown that forced expression of PPARgamma2 in cells of osteoblastic lineage causes their terminal differentiation to adipocytes and simultaneously suppresses the osteoblastic phenotype through an inhibition of expression of osteoblast-specific transcription factor Osf2/Cbfal. Based on the above, we propose the hypothesis that increased expression of PPARgamma2 in mesenchymal progenitors, and/or production of PPARgamma2 ligands, causes increased marrow fat development and decreased osteoblast formation, resulting in the osteopenia that occurs with advancing age. To address aspects of this hypothesis, we propose the following Specific Aims: (1) determine the mechanisms responsible for suppression of PPARgamma2 promoter activity in cells of osteoblast lineage and bone marrow mesenchymal progenitors; (2) determine whether the anti-osteoblastic and/or pro-adipocytic effects of PPARgamma2 are mediated through SMADs; and (3) determine the role of PPARgamma2 on the fate of mesenchymal progenitors of bone marrow and bone formation in vivo. Understanding mechanisms which lead to increased adipogenesis and decreased osteoblastogenesis with aging may create the possibility for direct modulation of the fate of mesenchymal progenitor cells by preventing adipogenic conversion of potential osteoblasts. Such intervention may slow down or even prevent age-related bone loss.